News24.com | Here's how elections could affect emerging markets in 2021 thumbnail

News24.com | Here’s how elections could affect emerging markets in 2021

  • From SA to Mexico, election results are set to influence market winners and losers in 2021. 
  • Protests are also likely to have an impact. 
  • Bloomberg has compiled a list of anticipated elections across Asia, Europe, the Middle East and Africa.

Elections are set to dominate the political calendar in emerging and frontier markets in a year when investors’ focus turns to how quickly governments are able to lift their economies from the global downturn.

The results of the votes in nations from South Africa to Mexico will help determine the market winners and laggards amid concern over valuation in EM assets after a rally boosted stocks to a record this year. The slew of protests in countries like Russia and Brazil also means that political developments will be closely monitored as traders assess shifts in the investment climate.

Among the first was Vietnam, where the Communist Party re-elected Nguyen Phu Trong to a rare third term as general secretary in January, signalling the country would continue its push for strong economic growth and maintain its tough anti-corruption campaign. The party’s central committee also elected 18 members of the Politburo, which in turn will nominate individual candidates to be prime minister, president and chair of the National Assembly. The parliament will vote on the nominees to the top government posts in the middle of this year.

In Ecuador, a socialist economist who rejects fiscal austerity demanded by the International Monetary Fund won the first round of the presidential election on Sunday. Andres Arauz will face either Yaku Perez, from the indigenous party Pachakutik, or the banker Guillermo Lasso in a runoff on April 11.

The following is a timeline of the main elections in emerging and frontier markets through the rest of 2021:

Asia

Malaysia general election

Date: Once the pandemic is under control

A general election is not due in Malaysia until 2023, but the largest party in the ruling coalition has repeatedly called for snap polls to be held, saying the government led by Prime Minister Muhyiddin Yassin holds a slim majority in parliament. The prime minister has committed to hold a general election as soon as the pandemic is brought under control. Malaysia declared a state of emergency on Jan. 13, a move which suspended parliament and was viewed by Muhyiddin’s opponents as a power grab.

Europe

Kosovo general elections

Date: February 14

Kosovo will hold elections — the second in less than two years — after its top court declared the country’s eight-month-old government illegal on the grounds that its approval in parliament was flawed. The ballot pits outgoing Prime Minister Avdullah Hoti and his centre-right Democratic League of Kosovo against leftist-nationalist Albin Kurti, a former prime minister toppled in a no-confidence vote in March.

Bulgaria parliamentary and presidential election

Date: parliamentary on April 4, presidential likely in October

Bulgaria has been in a deepening political crisis since last year, when anti-corruption protests pushed Prime Minister Boyko Borissov to consider resigning. The opposition-backed President Rumen Radev has repeatedly accused the prime minister of mafia links, which he has denied. With Borissov’s third term since 2009 ending in May, the parliamentary election in April and a presidential ballot in the fall offer voters the chance for a political reset. The president has said he will run for re-election.

Russia legislative elections

Date: September

Russia will hold elections for the State Duma lower house of parliament amid a harsh crackdown on dissent. President Vladimir Putin’s ruling United Russia party will struggle to hang onto a two-thirds majority as the economic fallout of the pandemic hurts its popularity. Jailed opposition leader Alexey Navalny, whose supporters are barred from participating, will use their “smart voting” tactic to encourage Russians to back any candidate other than those from the pro-Kremlin party.

Middle East

Israel parliamentary elections

Date: March 23

Israel is headed for its fourth vote in two years with Prime Minister Benjamin Netanyahu running against a crop of challengers who say it’s time for the indicted leader to go. Netanyahu, whose corruption trial kicked into high gear this week, wants to keep the public focused on the country’s world-beating vaccine campaign and his pledge to move the nation past the pandemic by April or May. The victor will have to kickstart the battered economy and manage ties with a Joe Biden administration that has shown it won’t be as agreeable as it was under former US president Donald Trump.

Iran presidential elections

Date: June 18

Iranians will elect a new president, as the era of Hassan Rouhani, who staked his career on clinching the historic nuclear deal with world powers in 2015, comes to an end, his legacy upended by hardliners in the US and at home. The candidates are mostly expected to be hardliners including former members of the Islamic Revolutionary Guard Corps, the country’s most muscular military arm, whose influence has surged since the US abandoned the nuclear deal. Biden has said he would return the US to the nuclear deal if Iran resumes complying with it.

North Africa

Libya presidential and parliamentary elections

Date: December 24

Libyan elections scheduled for December will mark a milestone for an OPEC member ravaged by a decade of conflict. The vote is aimed at capping a tumultuous, U.N.-led process to reconcile rivals who have been fighting since the 2011 ouster of longtime leader Moammar al-Qaddafi. The fighting largely crippled efforts to revive the economy, stabilise oil production and provide basic services to a population battered by one humanitarian challenge after another.

Algeria legislative elections

Date: Not set

Algeria’s military-backed rulers plan to hold local and legislative elections this year after two recent votes failed to end pro-democracy protests and redress the ailing OPEC economy. No date has been set for the votes amid sporadic absences by President Abdelmadjid Tebboune, who’s received treatment abroad for Covid-19-related conditions. In November, a majority of voters sat out a referendum on proposed constitutional reforms that failed to answer calls for a new order.

Morocco parliamentary elections

Date: September

Morocco will hold parliamentary elections in September amid concern that King Mohammed VI is using the pandemic to complete a reversal of democratic reforms that made the country a standout in a turbulent region. Justice and Development Party (PJD), a moderate Islamist group leading the ruling coalition, has denounced what it called attempts to violate democracy. Around 30 political parties will compete for the 395 seats in the lower house of parliament. The vote will also test whether the restoration of ties with Israel will cost the PJD the plurality it gained after the Arab Spring revolts. Under the law, a single party cannot hold a majority of seats in the house.

Sub-Saharan Africa

Ivory Coast national assembly elections

Date: March 6

The vote for the 255 members of the National Assembly will likely cement President Alassane Ouattara’s hold on power, with the ruling Rally of Houphouetists for Democracy and Peace planning to contest seats in all the nation’s 205 constituencies. Ouattara won a third term in presidential elections in October that his main rivals boycotted. Most opposition parties, including former President Henri Konan Bedie’s Democratic Party of Ivory Coast, will contest the legislative vote but have called for electoral reforms to ensure the contest is credible. The Generations & Peuples Solidaires, led by former rebel leader Guillaume Soro, won’t participate because it doesn’t trust the institutions that are organising it, but hasn’t called for a boycott.

Ethiopia general elections

Date: June 5

Ethiopia’s elections in June follow a bitter conflict that ensued when Prime Minister Abiy Ahmed cracked down on his detractors in the northern Tigray region, who staged local elections last year in defiance of an order to postpone them and attacked a federal army base. Some opposition parties have threatened to boycott the vote for the 547 members of the House of Representatives in protest of the arrest of a number of their leaders. While Abiy’s Prosperity Party will likely secure an outright majority, its margin of victory and voter turnout will indicate how Ethiopians view a raft of economic and political reforms introduced by the prime minister and his response to dissent.

Zambia presidential elections

Date: August 12

Political tensions are rising in Zambia ahead of elections in August that will likely pit President Edgar Lungu against long-time rival Hakainde Hichilema. Lungu narrowly won the last vote in 2016. Hichilema, who alleged the outcome was rigged, was arrested and spent four months in prison the following year after failing to pull off a road to allow a presidential convoy to pass. The elections will be closely monitored by investors as the copper-producing nation is unlikely to reach a funding deal with the IMF and restructure its debt until a new administration is in place. Zambia was the first African nation to default on debt payments during the pandemic.

South Africa municipal elections

Date: Second half of the year

The ruling African National Congress is looking to win back several major towns that it lost to opposition coalitions in a 2016 vote after many of its supporters deserted it in protest against then-president Jacob Zuma’s scandal-marred rule. The vote will indicate whether support for President Cyril Ramaphosa has been affected by an economic meltdown as the nation suffers Africa’s worst coronavirus outbreak. A failure to bring the pandemic under control could erode support for the ANC and may enable Ramaphosa’s detractors within the party to question his credibility.

Other African presidential elections

Date: 2021

Africa will be home to several presidential elections this year with votes in Benin, Cape Verde, Chad, Djibouti, Gambia, Niger, Republic of Congo, São Tomé and Príncipe, and Somalia.

Latin America

El Salvador legislative elections

Date: Feb. 28

El Salvador will elect new members of the 84-seat, unicameral Congress. President Nayib Bukele’s Nuevas Ideas party leads polls with nearly two-thirds support, putting him close to a qualified majority to easily pass legislation. Vice President Felix Ulloa said that he would seek to present constitutional reforms, which may include changes to presidential term limits, to the new legislature by September. Constitutional reforms in El Salvador must be approved by two legislatures, with the next legislative election coinciding with the 2024 presidential election.

Chile elections for constitutional convention, governors, mayors, Congress and president

Date: constitutional convention election in April, governors and mayors election on April 11, presidential election on November 21

Chile will elect in April delegates to an assembly in charge of drafting a new constitution, and that body will have as long as a year to complete its work. A new constitution was one of President Sebastian Pinera’s main commitments to appease the social crisis of late 2019. Chileans will also elect regional governors and mayors on April 11. Meanwhile, political parties have started holding primary elections ahead of the presidential and congressional elections on Nov. 21. So far, there is no clear winner to succeed Pinera. A potential runoff is scheduled for December 19.

Peru presidential and congressional elections

Date: April 11, and second round for presidential vote on June 6 if needed

Peru has had three changes of government since the last general election after a series of corruption scandals rocked the political establishment. Disillusionment with the country’s elites coupled with an economic crisis and the devastating pandemic has left voters looking for new political leaders. The presidential election remains wide open: Former soccer star George Forsyth has less than 20% support in recent polls and none of his more than a dozen rivals are polling more than 10%.

Mexico legislative and gubernatorial election

Date: June 6

Despite the coronavirus raging and Mexico’s economy plummeting by a record last year, President Andres Manuel Lopez Obrador’s populist Morena party holds a commanding lead in polls ahead of the June 6 legislative and gubernatorial election. Morena currently controls both houses of Congress with allies, and defending its majority will allow AMLO to push ahead with his commitment to austerity and efforts to revive the state oil giant Petroleos Mexicanos to its former glory. Mexico’s main three opposition parties are planning an unusual alliance to end his control of Congress.

Argentina legislative elections

Date: October 24

The legislative elections will mark the first major political test for President Alberto Fernandez, whose approval rating has fallen sharply over his management of the pandemic. The focus will be on whether the ruling coalition loses any ground in the Senate and whether the opposition will retain control of the lower house. The elections could complicate efforts to rein in government spending amid negotiations to repay a $45 billion loan to the IMF.

Nicaragua presidential elections

Date: November 7

Nicaraguan President Daniel Ortega will seek his fourth consecutive and fifth overall term as the country’s leader in his first election since a series of ongoing protests against his government erupted in April 2018. A historically divided opposition is seeking to rally behind one candidate to face Ortega.

Honduras general election

Date: November 28

Honduras will hold a general election to select a president and members of Congress. President Juan Orlando Hernandez, who faced accusations of electoral fraud in the 2017 race, has said he will not seek a third term. Political parties will elect candidates in a primary on March 14.

– With assistance from Michael Cohen, Ravil Shirodkar, Tarek El-Tablawy, Golnar Motevalli, Slav Okov, Souhail Karam, Colleen Goko, Michael McDonald, Valentina Fuentes, Max De Haldevang, Henry Meyer, Yaacov Benmeleh, Carolina Millan, Ignacio Olivera Doll, Stephan Kueffner, John Quigley, Khalid Al Ansary, Nguyen Dieu Tu Uyen and Jasmina Kuzmanovic.

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